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Arab society's potential untapped retards Israel's economic growth

The demonstrations by Israeli Arabs last week focused on the problem of criminal violence and murder in Arab towns, but the protest has its roots in a general demand for equality with the rest of the population of Israel, and for the changes required to advance Arab society in Israel in all areas of life.

A direct cause of the crime and violence is poverty. According to the Israel National Insurance Institute's poverty report released at the end of 2018, more than 47% of Arab families in Israel fall below the poverty line, meaning that their reported income does not reach the level required to support the family, as determined by the National Insurance Institute. Although the latest report indicated an improvement in the incidence of poverty in relation to the previous one, in which the statistic was 50%, the percentage is still alarmingly high.

All of the Arab local authorities are in the bottom half of the local authorities in Israel for socio-economic metrics, and they spend far less on their residents than the average authority. According to Ministry of Finance figures for 2013, an Arab local authority spent NIS 5,571 annually per resident, which compares with a general average of NIS 7,913, and an average for local authorities in Jewish areas of NIS 8,518. Spending of course depends on revenue, and in this respect Arab local authorities suffer from low collection rates for local taxes, but also, in fact mainly, from a lack of industrial and commercial zones, which generally account for a large slice of local authority revenue.

Four years ago, the poverty statistics, low participation in the workforce, and a low contribution to economic growth in Israel, led the government to plan and approve the 922 program, costing NIS 15 billion over a five-year period, for advancement and development of Israeli Arab society. The program has largely been implemented, and has already led to substantial change. It is possible that the improvement in the poverty statistics should in part be credited to this program. Nevertheless, the gaps remain wide.

Shortage of public buildings

Leaders of Israel's Arab community point out that the 922 program ends next year, and that a follow-on program is therefore required involving more funds to close the gap between the Arab and Jewish populations. On the basis of a plan compiled by the Mossawa Center - The Advocacy Center For Arab Citizens In Israel, members of Knesset for the Joint Arab List specified a sum of NIS 64 billion over ten years, or NIS 6.4 billion annually, for investment in job creation, planning, education, welfare, security, transport infrastructure, water, electricity, and Internet. The plan also calls for the construction of a new Arab city with a hospital and a university, recognition of unrecognized villages in the Negev and construction of infrastructure in them, and more.

MK Ahmad Tibi, leader of the Arab Movement for Change, says that Arab towns lack the kind of public buildings found in Jewish towns and villages. "Why isn't there a sports stadium in every large Arab settlement? Why is there no theater? Convention center? Library? So when I say that what is needed is a NIS 64 billion program over ten years, it's to remedy the distortions of 922."

The Mossawa Center claims that analysis of the 2019 budget shows that the Arab population's share of the state budget has not changed substantially over the years, and that this represents systematic discrimination arising from the strategy and outlook of Israeli governments. The Mossawa Center demands change in the budgeting mechanism to benefit sections of the population that receive less, such as the Arab population, and also complete transparency at government ministries, since at present ministries provide no information on their work plans and specific budget allocations.

One problem that is particularly severe among Israel's Arabs is housing. A plan for the sale of 5,000 housing units a year to the Arab population under the 922 program did not go well. One of the main reasons for the failure was the failure of the Israel Lands Authority and the Arab representatives to agree on how to switch to high-density housing.

Another reason is finance. Only 2% of mortgages granted in Israel are given to Arabs, representing just one tenth of their proportion in the population, which means that Arab families are unable to finance the construction or purchase of a home. Mossawa Center director Jafar Farah says that there is a direct connection between this fact and the level of crime and violence in Israeli Arab society. He says that crime organizations have filled the gap. They lend money to families and individuals in need of it for buying a home of for their businesses, and when people struggle to make repayments, they are subjected to violence.

The economic logic of narrowing gaps that lay behind the 922 program called for larger government budgets to be allocated to the Arab sector without a time limit. For example, it was stipulated that 40% of the Ministry of Transport's budget for public transport should be directed towards the Arab sector. In other words, the NIS 15 billion price tag of the 922 five-year plan is not precise, as the plan continues beyond the five-year period at an estimated annual cost of NIS 2 billion. In effect, the heads of the Arab community are asking for this sum to be doubled in order to deal with the chronic problems of Israeli Arab society. This does not look like an amount of money that the state cannot handle, especially given the unexploited potential, economic and otherwise, of Arab society. Leaving this potential untapped hampers economic growth in Israel generally.

Other factors, however, must be considered. One of them is Israeli Arabs' political leadership. Arab members of Knesset reject he claim that they do not do enough for the people whom they are supposed to represent, and rightly state that their main legislative activity is in the social and economic spheres. But when it comes to speeches and public declarations, in both Hebrew and Arabic, the overwhelming majority of them concern Israel's conflict with the Palestinians. Change is required in this respect as well.

Another important factor is the structure of Arab society, which is changing, but slowly. The patriarchal character of this society perpetuates norms and traditions that prevent progress, such as in the education and employment of women, and in many other areas. The difficulty of adapting to high-density living when land for construction is in short supply is another problem of this kind, as is the low priority given to communal problems, manifest in the campaign against compulsory purchases of land for public buildings. In the town of Tur'an, local council head Imad Abd al-Amin, who was considered highly successful, was ousted in the last local elections, and his ouster is attributed to his efforts to combat this phenomenon, and the compulsory purchase of private land for public needs.

Dan Zaken